Friday, July 24, 2015

Timing is Right for Redevelopment

In celebration of’s 15th anniversary coverage, we asked CORFAC International president Scott Savacool about the topic of development, redevelopment and adaptive reuse on older buildings. He tells that it is a major trend these days, and in fact, points out that it is happening all over the country.

In fact, he points out that three CORFAC firms are currently involved in three major redevelopment and conversion projects that are bringing to life some older and historic commercial properties in their respective communities.

Lehigh Valley, PA: Michael Bartolacci with The Garibaldi Group/CORFAC International (Bethlehem, PA) is working with developer Glendon Properties in Wilson Borough on the massive redevelopment of the former Dixie Cup plant, a 600,000-square-foot, four-story property.

The building was constructed in 1921 for what became the largest cup manufacturing company for decades in the U.S. When complete, Dixie Commons - as the project is now called, will consist of 233 upscale apartment homes in one-bedroom, two-bedroom and studio configurations plus 141,200 square feet of commercial and retail space. Bartolacci was tapped to market the office space.

Joseph Reibman, the president of Glendon Properties and also the Managing Partner for the limited partnership that owns the property, has been involved with the Dixie Cup plant for more than 30 years. The plant structure features poured-in-place concrete-slabs with nine-inch thick walls and floors.

The Dixie Cup Corporation merged with the American Can Company in 1957 and by the late 1970s Dixie relocated its manufacturing to a new facility in the Easton, PA, area. In the 1980s, Reibman and his partners acquired and leased the Dixie building to a third-party logistics provider for use as a warehouse/distribution center.  Major customers were ALPO Pet Foods (cans), Mobil Chemical's (now Pactiv) consumer products division and Hefty (trash bags) for distribution throughout the East Coast. Yet demand for multi-story properties for logistics operators lost favor to the single-story industrial buildings with generous ceiling heights that are commonly used by distribution companies today.

Reibman tells that the timing is right for the redevelopment and the market demand is high for this type of mixed-use property.

“We were approached by an investor/developer in 2006 to sell the building – they had plans to convert the building to apartments then, but the financing market disappeared with the recession. Our property is only 60 miles to New York City, we have major employers nearby and 11 colleges and universities in the area. Approximately 25,000 people from the Lehigh Valley commute to work – many of them to Manhattan, and they are generally good-paying jobs. Wilson Borough and neighboring Easton can certainly support new housing and there is also good demand for office space here,” Reibman said.

Reibman is currently working on financing the $70 million to $80 million redevelopment and gathering final bids for environmental work (the concrete columns were painted with lead-based paint and most of the plumbing was wrapped in asbestos). He hopes to have the environmental work done by the end of the year and renovate the exterior of the building all at once including the installation of new windows. The apartments and office space will be built out in phases beginning in 2016. Part of the project calls for removing sections of roofing to open up courtyards in between building wings, which will also allow for copious amounts of light to enter the future apartments. The apartments and office space will have oversized windows and ceiling heights between 12 feet and 14 feet, according to Reibman. The ground floor retail areas have not been leased, though Reibman believes that a restaurant operator will likely want some of the space, and there are tentative plans for a wine bar.

NK Architects of Morristown, NJ, and New York City are the project architects.

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